To start off 2019 right, we’re going to share four key trends that buyers and sellers should keep an eye on this year:
1. There will be more homes for sale, especially in the luxury markets. For the past year, all we’ve been talking about is our low inventory levels. This past winter, we actually hit record lows. We’ve been joking that there are more Realtors out there than there are homes for sale right now. With all that said, we should expect to see inventory increase this year. With a modest slowdown in buyer activity, we should see supply recover. Where we’re really going to see a difference is in the $500,000+ luxury market, which has already shifted to a bit of a buyer’s market.
“Millennials will still dominate the home buying market.”
2. Affording a home is going to become more difficult. In the fourth quarter of 2018, we saw an increase in mortgage interest rates. This has dipped back down since the beginning of the year and has held fairly steady since, but we can expect to see rates go up at least twice in 2019. When you couple this with increased home prices, affordability will drop, making it harder for buyers. As for sellers, the earlier you list, the better off you’re going to be. The same message goes for buyers.
3. Millennials will still dominate the home buying market. Millennials are now the largest demographic of homebuyers, making up 45% of mortgages. Expect that number to increase in 2019 as we see more and more first-time buyers.
4. The new tax law is still a wild card. Many people thought that last year’s tax reform would discourage home buying because of the increase in the standard deduction. However, we won’t really see that effect until people file their taxes in April. We should have some more answers on what this law will mean for our market in the next few months.
If you have any questions about any of these topics or about real estate in general, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.